Abstract
For simplicity or realism, determinacy analysis for overlapping-generations models typically aggregates all conceivable commodities into a fixed, finite number of types. Analysis finds robust examples with indeterminate equilibria, which suggests indeterminacy may be significant among overlapping generations. But does robust indeterminacy exist despite that simplifying aggregation? or because of aggregation? We suggest the latter with a generic determinacy theorem for overlapping-generations models with idealized competitive markets for a continuum of commodities in discrete or continuous time. And aggregating the continuum of commodities into a finite number of types transforms some of those generic, determinate models into ostensibly-robust indeterminacy examples.
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Thanks to Gaetano Bloise, John Geanakoplos, and Herakles Polemarchakis for encouragement and helpful comments during my presentations at the 10th Annual Conference on General Equilibrium and its Applications, at Yale, and at the XXVII European Workshop on General Equilibrium Theory, at University Paris 1. And thanks to a referee of this journal for helpful improvements.
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Burke, J.L. Generic determinacy among stationary overlapping generations. Econ Theory 73, 977–993 (2022). https://doi.org/10.1007/s00199-021-01340-1
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DOI: https://doi.org/10.1007/s00199-021-01340-1